What Are HOA Assessments?

People who live in a neighborhood governed by a homeowners' association (HOA) typically have to pay HOA fees and assessments.

By , Attorney University of Denver Sturm College of Law
Updated 6/24/2025

People who live in a neighborhood with covenants and a homeowners' association (HOA) usually have to pay HOA fees and, at times, special assessments. If you don't pay the HOA fees or assessments, most HOAs have the right to try to collect from you in various ways, such as by placing a lien on your home. In many cases, the lien attaches to the property automatically. Then, if you don't bring the dues current, the HOA most likely has the right to foreclose your home.

What Is an HOA Assessment?

People often use the terms "HOA assessment" and "HOA dues" interchangeably, but technically they're different. HOA dues (or "fees") are recurring payments that usually happen monthly, quarterly, or annually. These charges cover the day-to-day costs of the HOA and pay for such things as landscaping, maintenance, and amenities.

HOA assessments, on the other hand, pay for unanticipated items or expenses not covered by the dues or the HOA's reserve fund. For example, an HOA might levy a special assessment to pay for a new private road, plumbing overhauls, roof repairs to a common facility, renovating a community clubhouse, or adding pickleball courts or a swimming pool to the community.

HOA Dues vs. Assessments

Again, there's a difference between HOA dues and assessments.

What Do HOA Dues Cover?

Generally, each unit or household in an HOA must pay a monthly, quarterly, or yearly HOA fee based on the board's budget. This fee is often called "dues." The monthly, quarterly, or yearly HOA fee consists of two parts:

  • An amount to cover the current year's operations. Part of the fee will be designated for current-year operations, typically including landscaping, snow removal, pool maintenance, insurance, and water.
  • An amount that goes into reserves. The remaining portion of the fee is placed into reserves for long-term repairs and replacements, like a new roof for the community cente, a new road, or to cover the cost of building additional parking lots. Having ample reserves ensures (or attempts to ensure) that the HOA has money available to pay for high-cost repairs and improvements.

So long as the HOA board accurately predicts which repairs will come due (and when), the dues should cover the current operating expenses and long-term maintenance.

What Do HOA Assessments Cover?

Sometimes, HOA fees and reserves aren't sufficient to cover all of the HOA's expenses. So, when necessary, the HOA may impose a one-time special assessment. An HOA typically levies a special assessment when:

  • The HOA's operating expenses are higher than expected.
  • The HOA has unanticipated expenses, such as damage from a natural disaster, emergency, or accident, and the associated costs exceed the annual budget or insurance coverage.
  • The reserve funds have been used up, so the HOA can't cover major repairs, replacements, or community improvements.

In these instances and others, the HOA can usually charge homeowners a special assessment.

Some HOA special assessments require a homeowner vote. Whether or not a homeowner vote is required depends on the HOA's governing documents, such as the bylaws and Declaration of Covenants, Conditions & Restrictions (CC&Rs) and, perhaps, state laws. In California, for example, an HOA can charge an assessment that's more than 5% of the fiscal year's gross budgeted expenses without the approval of a majority of HOA members. (Ca. Civ. Code § 5605(b) (2025).)

What Is the Purpose of HOA Dues or an HOA Assessment?

The purpose of HOA dues and HOA assessments is the same: They pay for neighborhood expenses.

Summary of HOA Dues vs. HOA Assessments

Here's chart explaining the difference between HOA dues and assessments.

Characteristic of the HOA Charge

HOA Dues (Fees)

HOA Assessment (Special Assessment)

Frequency

Recurring, regular, and predictable (monthly/quarterly/annual)

When necessary, one-time fee, occasional

Purpose

Routine operations, maintenance

Unexpected, unbudgeted, or emergency expenses

Approval

Planned for and set in the annual budget

Board approval needed, might require homeowner vote

Examples

Landscaping, pool maintenance

Storm damage repairs, uninsured losses

How Are HOA Dues and Assessments Determined?

An HOA has a board of directors. Each year, the board develops a budget for the community and decides how much to charge each unit or household as a monthly (or, in some cases, yearly or quarterly) HOA fee. The board typically takes the total amount needed and divides it by the number of homes in the community, splitting the cost equally.

But the board's predictions aren't always accurate. Occasionally, the HOA might need to come up with more funds. In that case, the board usually has the authority to impose a special assessment to cover the one-time expense of a major repair or improvement. Again, the cost is usually split equally. For example, if the HOA expects to need $100,000 to repair a damaged clubhouse and there are 100 homes in the HOA, each must pay $1,000 as a special assessment.

Are HOA Assessments Tax Deductible?

Generally, HOA fees and assessments aren't tax deductible. If you live in a home that's part of an HOA as a primary residence, those costs are considered personal expenses. Under some circumstances, however, you might be able to add an amount for a special assessment to your cost basis when you sell the property.

However, if you own a rental property and pay HOA dues or assessments for that rental property, you might be able deduct them as an expense, depending on the situation. Also, if you exclusively use part of your home as a home office for business purposes, you can probably deduct a portion of your HOA dues or assessments proportional to the area you use for business.

Whether you can deduct an expense is complicated. Whether you can deduct money you pay to an HOA varies depending on the situation. And repairs and improvements are treated differently under the tax code. Talk to a tax adviser if you need tax help or have questions about what you may deduct.

What Happens If I Don't Pay My HOA?

If you don't pay your HOA, it has various way to try to collect from you. For example, the HOA might take away your ability to use common facilities, such as a pool or gym, or it might file a lawsuit against you.

In addition, most HOAs can place a lien on the homeowner's property when dues or special assessments go unpaid. Once the HOA has a lien on a homeowner's property, it may foreclose as permitted by the CC&Rs and state law.

How to Dispute an Unfair HOA Assessment

Finding out about an HOA special assessment can be frustrating. After all, this is an extra expense you weren't expecting. However, if your HOA says you must pay a special assessment, you'll probably have to pay it even if you think it's unfair. When you bought a home in an HOA community, you agreed to comply with the governing documents, including the association's bylaws and CC&Rs. So, if the governing documents, typically the CC&Rs (and state law), allow the charge, you're on the hook for it.

If you think an assessment isn't allowable, you could potentially challenge the assessment with the board or by filing a lawsuit in court. However, if a court finds the assessment reasonable and allowed, you might have to pay even more because you could be responsible for paying the HOA's legal costs.

Fortunately, special assessments are relatively rare. Often, the HOA's dues and reserves will cover unexpected costs that arise. And most HOA governing documents require the HOA to give adequate notice before requiring you to pay a special assessment.

Can Unpaid Assessments Affect My Mortgage or Ability to Sell My Home?

Not paying your HOA assessments can hinder your ability to sell your home. Again, if you don't pay the HOA, it can get a lien on your home. That lien acts as a "cloud" on title. You'll probably have to pay off the lien to sell the home. You might have to pay the HOA at closing in order for the deal to go through.

An HOA lien might affect your mortgage. In some states, HOA liens get super-priority status, which means that if the HOA forecloses, the mortgage gets wiped out. So, most mortgage lenders in super-lien states will pay the HOA if you don't. Then, the lender will seek reimbursement from you. If you don't pay the lender, it will probably foreclose.

Talk to an Attorney About HOA Assessments and Foreclosure

If you're facing a foreclosure due to unpaid HOA assessments, consider talking to a foreclosure attorney in your state to discuss all legal options available in your particular circumstances. You might be able to work out a payment plan with the HOA or you might have a defense to the foreclosure.

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